How SpiceJet is likely to benefit from Jet-Etihad deal
The Jet Airways- Etihad deal has raised hopes for SpiceJet, which is also in stake sale talks with Qatar Airways though its management is continuously denying it.
April 25, 2013 / 15:25 IST
Moneycontrol Bureau
The Jet Airways- Etihad deal has raised hopes for SpiceJet, which is also in stake sale talks with Qatar Airways though its management is continuously denying it. Here’s why SpiceJet holds a bright chance to attract foreign airlines * Its market share has risen 51 percent to 20.4 percent since September 2011* It has cleaner balance sheet compared to industry players with debt of Rs 1190 crore.* Recent equity infusion by promoter gives comfort and lays groundwork for foreign equity participation. (Early this week, management converted debentures of Rs 126 crore at Rs 36.2/share and also infused Rs 99 crore in June quarter of FY13.* Its international segment is picking up pace by clocking in 80 percent load factors after it started flights on three new global routes in November.* It is a major beneficiary of recent fall in crude prices. Its average fuel cost is likely to dip to Rs 57/litre in current financial year from Rs 60/litre year-on-year.* Allocation of bilateral traffic rights to Indian private carriers is positive considering tax rationalization for aviation fuel and direct subsidy for small town to boost regional connectivity.* In December quarter of FY13, the company reported stellar numbers with revenues climbing 32.7 percent to Rs 1602 quarter-on-quarter.
It reported profit of Rs 102 crore versus loss of RS 163.52 crore
EBITDA at 138.8cr vs EBITDA loss of 130.5 crore.* Average yields per passenger has gone up 29 percent YoY to Rs 4412 due to higher ticket prices.* Load factors are pretty strong at 75% versus 66.3% QoQ despite significant capacity addition * Overall Passenger growth at 7 percent relatively much better placed compared to industry de growth of 3 percent from Jan to Nov (Q3 industry growth figures not out) HSBC has upgraded SpiceJet stock to overweight and has lowered target price to Rs 40 from the earlier price of Rs 45. The key catalyst at this stage would probably be a prospective stake sale announcement by an Indian airline, it saidSpiceJet Stock has risen almost 15 percent in past two weeks on falling crude price. Also, promoters of the company continue to raise stake and overall promoter holding is up to 52.14 percent from 48.59 percent
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